China's collectivization puzzle : a new resolution

According to total factor productivity trends in Chinese agriculture, China achieved productivity gains both when collectivizing (1954-1958) and when decollectivizing (1979-1984) its agriculture. If the productivity gains from decollectivization were due mainly to eliminating the incentive problems of collective farms, how the initial collectivization could also have been associated with gains in productivity presents a major historical puzzle. We suggest as an answer the possibility that agricultural production in China was widely organized on a household basis until 1958, despite the collectivization of property rights, and that the formation of the agricultural producers’ cooperatives reduced the inefficiencies in factor allocation that existed following China’s land reform.